Breaking Down Clarus Corporation (CLAR) Financial Health: Key Insights for Investors

As an investor, are you keeping a close watch on Clarus Corporation's (CLAR) financial performance? Did you know that in 2024, the company reported a revenue of $264.3 million, a decrease from $286.0 million in 2023? While sales have decreased, the company's gross margin actually improved to 35.0% from 34.1%. With a net loss of $52.3 million, and adjusted EBITDA at $6.9 million, let's dive deeper into the key insights that can help you evaluate Clarus Corporation's financial health and future prospects.

Clarus Corporation (CLAR) Revenue Analysis

Understanding Clarus Corporation's (CLAR) revenue streams involves examining its primary revenue sources, year-over-year growth, and the contribution of different business segments. A detailed analysis reveals key insights into the company's financial health and areas of growth and decline.

Clarus Corporation focuses on the outdoor enthusiast markets. The company operates through two main segments: Outdoor and Adventure.

• Outdoor: Includes brands like Black Diamond Equipment.
• Adventure: Includes brands like Rhino-Rack, MAXTRAX, and TRED Outdoors.

For the full year 2024, Clarus Corporation reported a 7.6% decrease in sales, with revenue of $264.3 million compared to $286.0 million in 2023. This decline was primarily due to continued softness across all selling channels in the Outdoor segment, the effects of the company's product line simplification strategy, and lower Adventure segment sales. The Adventure decline resulted from less OEM channel demand and challenging wholesale markets globally, partially offset by the benefit from the TRED Outdoors acquisition.

A more detailed breakdown of the revenue streams is as follows:

• Outdoor Sales: Declined by 10% to $183.6 million. This decrease was attributed to softness across all selling channels and the company's product line simplification strategy.
• Adventure Sales: Declined by 1.5% to $80.7 million. The decline was due to less OEM channel demand and challenging wholesale markets.

The following table summarizes the revenue changes between 2023 and 2024:

In the fourth quarter of 2024, company-wide sales were $71.4 million, a 6.6% year-over-year decline. This was attributed to challenges with two large accounts in the OEM and Australian wholesale channels in the adventure segment. However, this decline was offset by growth in North American wholesale channels and international distribution channels in the outdoor segment.

A look at the revenue for Q4 2024:

• Outdoor sales: $51.1 million, a 2% increase from the previous year.
• Adventure segment sales: decreased 22.9% to $20.3 million.

For more insights into the company's mission, vision, and core values, you can refer to Mission Statement, Vision, & Core Values of Clarus Corporation (CLAR).

Clarus Corporation (CLAR) Profitability Metrics

Understanding a company's profitability is crucial for investors. Here's a breakdown of Clarus Corporation's profitability metrics, focusing on gross profit, operating profit, and net profit margins.

For the full year 2024, Clarus Corporation reported:

• Sales of $264.3 million compared to $286.0 million in 2023.
• Gross margin of 35.0% compared to 34.1% in 2023. The adjusted gross margin was 37.5% compared to 35.6% in the previous year.
• Net loss of $52.3 million, or $(1.37) per diluted share, compared to a net loss of $10.1 million, or $(0.27) per diluted share in 2023.
• Loss from continuing operations of $88.4 million, or $(2.31) per diluted share, compared to a loss from continuing operations of $15.8 million, or $(0.42) per diluted share.
• Adjusted EBITDA was $6.9 million, with an adjusted EBITDA margin of 2.6%.

Here's a look at Clarus Corporation's profitability trends over time:

Clarus Corporation's gross margin increased to 35.0% in 2024 from 34.1% in 2023. This increase was primarily due to a favorable product mix within the Outdoor segment, resulting from product simplification and SKU rationalization efforts, along with a favorable Adventure segment channel mix due to reduced OEM sales.

However, the net loss significantly increased to $52.3 million in 2024 compared to $10.1 million in 2023. This increase was majorly impacted by a non-cash impairment charge of $44.8 million within the Adventure segment, related to goodwill and indefinite-lived intangible assets, along with a $21.0 million tax expense for deferred tax liabilities.

For the fourth quarter of 2024, Clarus reported:

• Sales of $71.4 million compared to $76.5 million in the same quarter of the previous year.
• Gross margin of 33.4% compared to 28.9%, with an adjusted gross margin of 38.0% compared to 34.7% in the prior year.
• Net loss of $65.5 million, or $(1.71) per diluted share, compared to a net loss of $8.4 million, or $(0.22) per diluted share, in the same period last year.
• Adjusted EBITDA from continuing operations of $4.4 million, with an adjusted EBITDA margin of 6.1%, up from $1.6 million and 2.1%, respectively.

Clarus Corporation is focused on growing its net income through revenue growth and cost control. For more insights into the company's strategic direction, you might find this link helpful: Mission Statement, Vision, & Core Values of Clarus Corporation (CLAR).

Selling, general, and administrative (SG&A) expenses in 2024 were $111.9 million, compared to $114.6 million in 2023. The decrease was primarily due to lower retail expenses from store closures and reduced marketing and research and development expenses in the Outdoor segment. However, these decreases were partially offset by investments in global marketing, operational improvements, and e-commerce initiatives to accelerate growth in the Adventure segment, as well as incremental SG&A from the TRED Outdoors acquisition.

In Q3 2024, the gross margin was 35.0% compared to 33.6%, and the adjusted gross margin was 37.8% compared to 33.6% in the same year-ago quarter.

In Q2 2024, the gross margin was 36.1% compared to 39.0% in the year-ago quarter. The adjusted EBITDA from continuing operations was $(1.9) million, or an adjusted EBITDA margin of (3.4)%, compared to $1.0 million, or an adjusted EBITDA margin of 1.7%, in the same year-ago quarter.

Clarus Corporation is focused on managing costs and improving operational efficiency as part of its strategic plan.

Clarus Corporation (CLAR) Debt vs. Equity Structure

Understanding how Clarus Corporation finances its operations and growth is crucial for investors. The balance between debt and equity reveals insights into the company's financial risk and stability. Here’s a breakdown of Clarus Corporation's debt levels, ratios, and financing strategies.

Clarus Corporation's financial structure includes a mix of debt and equity. Analyzing the specifics of their debt helps assess their financial leverage and risk profile. As of the fiscal year 2024:

• Long-term debt: Clarus Corporation has a significant amount of long-term debt, reflecting investments in strategic initiatives and acquisitions.
• Short-term debt: The company also utilizes short-term debt to manage immediate operational needs and seasonal working capital requirements.

The debt-to-equity ratio is a key metric for evaluating a company's financial leverage. It indicates the proportion of debt and equity used to finance the company's assets. For Clarus Corporation:

• Debt-to-equity ratio: Clarus Corporation’s debt-to-equity ratio stands at 1.73, which is above the acceptable range. This ratio suggests that the company relies more on debt than equity to finance its assets, indicating higher financial leverage.

Recent activities in debt markets can provide insights into Clarus Corporation's financial strategy and investor confidence:

• Recent Debt Issuances: Recent debt issuances have been used to refinance existing debt and fund acquisitions, reflecting a proactive approach to managing its capital structure.
• Credit Ratings: Monitoring credit ratings from agencies like Standard & Poor's and Moody's provides an external assessment of Clarus Corporation's creditworthiness.
• Refinancing Activity: The company has strategically refinanced debt to take advantage of lower interest rates and extend maturity dates, optimizing its debt profile.

Clarus Corporation strategically balances debt and equity to fund its growth and manage financial risk. The approach involves:

• Strategic Use of Debt: Utilizing debt for specific investments and acquisitions, ensuring that these activities contribute to revenue growth and profitability.
• Equity Funding: Balancing debt with equity to maintain a healthy capital structure and reduce financial risk.

For additional insights into Clarus Corporation's values and long-term goals, check out: Mission Statement, Vision, & Core Values of Clarus Corporation (CLAR).

Clarus Corporation (CLAR) Liquidity and Solvency

Assessing a company's financial health involves a deep dive into its liquidity and solvency positions. For Clarus Corporation (CLAR), evaluating these aspects provides key insights for investors. Here's a breakdown of CLAR's liquidity:

Liquidity Ratios:

• Current Ratio: As of the most recent quarter ending December 31, 2024, CLAR's current ratio stands at 4.93. This indicates a strong ability to cover short-term obligations with its current assets.
• Quick Ratio: The quick ratio for the same period is 2.50, suggesting that CLAR can meet its short-term liabilities even without relying on the sale of inventory.

Working Capital Trends:

An analysis of Clarus Corporation's working capital trends reveals the following:

• Net current asset value is $116.78 million.

Cash Flow Statements Overview:

A review of CLAR's cash flow statements provides insights into its operating, investing, and financing activities.

• Net cash used in operating activities for the year ended December 31, 2024, was $7.3 million, compared to net cash provided by operating activities of $31.9 million in 2023.
• Capital expenditures in 2024 totaled $6.7 million, compared to $5.7 million in the previous year.
• Free cash flow for the year ended December 31, 2024, was $(14.0) million, compared to $26.2 million in the same period last year.
• However, net cash provided in operating activities for the three months ended December 31, 2024, was $16.6 million, compared to $14.5 million in the prior year quarter.

The following table summarizes key cash flow components for 2024 and 2023:

Potential Liquidity Concerns or Strengths:

• Strengths: Clarus Corporation maintains a strong liquidity position with a current ratio of 4.93 and a quick ratio of 2.50. The company's cash and cash equivalents totaled $45.4 million as of December 31, 2024, a significant increase from $11.3 million at the end of 2023. Total debt also decreased substantially from $119.8 million in 2023 to $1.9 million in 2024.
• Concerns: Despite the strong liquidity position, the company experienced a net loss of $52.3 million in 2024 and negative cash flow from operations of $7.3 million.

To gain more insight into the investors of Clarus Corporation, consider reading Exploring Clarus Corporation (CLAR) Investor Profile: Who’s Buying and Why?

Clarus Corporation (CLAR) Valuation Analysis

To assess whether Clarus Corporation (CLAR) is overvalued or undervalued, several key financial metrics and market indicators should be considered. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, as well as stock price trends, dividend yield, payout ratios, and analyst consensus.

Analyzing these metrics provides a comprehensive view of the company's valuation relative to its financial performance and market expectations.

Here's a breakdown of key valuation aspects:

• Price-to-Earnings (P/E) Ratio: The P/E ratio compares a company's stock price to its earnings per share (EPS). A lower P/E ratio might suggest undervaluation, while a higher ratio could indicate overvaluation.
• Price-to-Book (P/B) Ratio: This ratio compares a company's market capitalization to its book value of equity. A lower P/B ratio can indicate that the stock is undervalued.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio compares a company's enterprise value (total market value plus debt minus cash) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). It provides a more comprehensive valuation measure, especially when comparing companies with different capital structures.

Recent data and analyst estimates are essential for an accurate valuation. As of April 2025, it's important to refer to the most current financial data to evaluate these ratios effectively.

Stock Price Trends: Examining the stock price trends over the last 12 months (or longer) can reveal investor sentiment and market dynamics affecting Clarus Corporation. Significant price increases might suggest overvaluation, while declines could indicate undervaluation, although these trends should be correlated with the company's financial performance and broader market conditions.

Dividend Yield and Payout Ratios: If Clarus Corporation pays dividends, the dividend yield (annual dividend per share divided by stock price) and payout ratio (percentage of earnings paid out as dividends) are important. A higher dividend yield can make the stock attractive, but a high payout ratio might raise concerns about the sustainability of the dividend.

Analyst Consensus: Major brokerage firms and investment banks provide ratings (buy, hold, or sell) and price targets for stocks. The consensus of these analysts can offer insights into how the market views Clarus Corporation's valuation and future prospects.

To consolidate this information, consider the following table as a representation of the valuation metrics:

Keep in mind that these values are examples and should be replaced with the latest available data for an accurate assessment. Always cross-reference multiple sources and consider both quantitative and qualitative factors when evaluating whether Clarus Corporation is overvalued or undervalued.

For further insights into investor behavior, check out: Exploring Clarus Corporation (CLAR) Investor Profile: Who’s Buying and Why?

Clarus Corporation (CLAR) Risk Factors

Clarus Corporation (CLAR) faces a variety of internal and external risks that could significantly impact its financial health. These risks range from broad market challenges to specific operational and strategic concerns.

Here's an overview of key risks:

• Market and Competitive Risks: Fluctuations in consumer demand, influenced by economic conditions and consumer confidence, can significantly affect Clarus's performance. The company operates in a competitive landscape alongside brands such as Patagonia, The North Face, and Arc'teryx. Intense competition and changing consumer preferences require continuous innovation and adaptation.
• Financial Risks: Volatility in global currency, capital, and credit markets can disrupt operations. The financial health of retail economies and Clarus's customers is also a critical factor.
• Operational Risks: Challenges in implementing and integrating acquisitions can lead to material differences in financial results. Disruptions and other impacts to the company's business, as a result of the COVID-19 global pandemic and government actions and restrictive measures implemented in response; stability of the Company's manufacturing facilities and suppliers, as well as consumer demand for our products, in light of disease epidemics.

These factors highlight the need for Clarus to proactively manage its risk exposure across various fronts.

Key risks highlighted in recent earnings reports and filings include:

• Decline in Stock Price: A non-cash impairment charge of $44.8 million in the Adventure segment was recorded due to a decline in the company's stock price and lower sales and profitability than expected.
• Earnings Miss: Clarus reported a significant miss in earnings per share (EPS) for the fourth quarter of 2024, with a reported EPS of -$1.71 compared to the anticipated $0.01.
• Sales Decline: Sales decreased to $264.3 million compared to $286.0 million in the previous year. Outdoor sales were down 10.0% to $183.6 million, and Adventure sales were down 1.5% to $80.7 million.
• Adjusted EBITDA: Adjusted EBITDA from continuing operations in the fourth quarter was $4.4 million, or an adjusted EBITDA margin of 6.1%, compared to $1.6 million, or an adjusted EBITDA margin of 2.1%, in the same year-ago quarter.

Despite these challenges, analysts project profitability for the year, with an EPS forecast of $0.22.

Clarus is actively implementing several mitigation strategies to address these risks:

• Operational Simplification: Streamlining organizational structure and product categories to enhance efficiency and profitability.
• Inventory Optimization: Managing inventory levels to align with market demand, focusing on high-margin, in-demand products. Inventory was down 4% year-over-year in Q3 2024.
• Product Streamlining: The Outdoor segment is undergoing product streamlining, which is expected to improve future performance.
• Global Expansion: Scaling the Adventure segment's global footprint, particularly in North America and Europe.

These strategies aim to improve financial stability and capitalize on long-term growth opportunities.

Here’s a summary of Clarus Corporation's financial performance in 2024:

Despite a challenging market environment, Clarus maintains a strong current ratio of 4.93 and holds more cash than debt on its balance sheet, suggesting financial stability.

For more insights into Clarus Corporation, explore Exploring Clarus Corporation (CLAR) Investor Profile: Who’s Buying and Why?

Clarus Corporation (CLAR) Growth Opportunities

Clarus Corporation (CLAR) is strategically positioned to capitalize on several growth drivers, despite facing recent market headwinds. The company's focus on innovation, market expansion, and strategic initiatives provides a foundation for future growth.

Key growth drivers for Clarus Corporation (CLAR) include:

• Product Innovation: Clarus emphasizes technical innovation and premium product quality, supported by a vertically integrated design and development process. The company holds 17 active patents, reflecting its commitment to proprietary technology.
• Market Expansion: Clarus distributes its brands globally through various channels, including specialty retailers, online platforms, distributors, and original equipment manufacturers (OEMs). The company is focused on scaling its Adventure segment in North America and Europe.
• Strategic Initiatives: Clarus is focused on simplifying and strengthening its core Outdoor segment while investing in new R&D and product development initiatives to scale the Adventure segment.
• Acquisition of RockyMounts: The recent acquisition of RockyMounts is expected to expand Adventure's bike-rack product capabilities globally.
• SKU Rationalization: Clarus has made significant progress in product simplification and SKU rationalization, which has contributed to improved gross margins.

Future revenue growth projections and earnings estimates include:

• Revenue Guidance for 2025: Clarus anticipates sales in 2025 to range between $250 million and $260 million.
• Adjusted EBITDA: The company projects an adjusted EBITDA of approximately $14 million to $16 million for 2025, with an adjusted EBITDA margin of 5.9% at the mid-point of revenue and adjusted EBITDA.
• Capital Expenditures: Capital expenditures are expected to range between $4 million to $5 million for the full year 2025.
• Free Cash Flow: Free cash flow is expected to range between $8 million to $10 million for the full year 2025.
• Analyst Estimates: The consensus EPS forecast for the quarter ending December 2025 is -$0.03. The consensus EPS forecast for the fiscal year ending December 2025 is $0.10. Revenue is expected to reach $62.05 million for the next quarter.

Strategic initiatives and partnerships that may drive future growth:

• Focus on Core Segments: Clarus is concentrating on its core Outdoor segment while strategically investing in the Adventure segment to drive growth.
• Product Development: Enhanced product development and commercialization processes are expected to lead to the launch of compelling new products.
• Strategic Review of PIEPS: A strategic review was initiated for the PIEPS snow safety brand within the Outdoor segment in 2024.

Clarus Corporation's competitive advantages that position the company for growth:

• Proprietary Technology: A portfolio of 17 active patents provides a competitive edge through unique and protected technologies.
• Brand Recognition: Strong brand recognition in the outdoor and adventure products industry, with reputable brands like Black Diamond and Rhino Rack.
• Financial Stability: A debt-free balance sheet provides financial flexibility for strategic initiatives and weathering market challenges. As of December 31, 2024, cash and cash equivalents amounted to $45.4 million. Total debt amounted to $1.9 million.
• Experienced Management Team: An experienced and incentivized senior management team is focused on executing the company's strategic roadmap.
• ESG Focus: Commitment to sustainability and ESG-friendly practices enhances the company's market position.

Despite these advantages, Clarus faces challenges including macroeconomic headwinds and regional market softness. However, the company's strategic focus and debt-free balance sheet provide a solid foundation for overcoming these obstacles and achieving sustainable, long-term growth.

For more insights into Clarus Corporation's investors, explore: Exploring Clarus Corporation (CLAR) Investor Profile: Who’s Buying and Why?